The hotel industry (like every other one) has gone through an extensive digitization process leading to loads of data just piling up. But Artificial intelligence (AI) and machine learning (ML) are changing all that. AI is today integrating with the technology used by the hospitality industry to help hotel owners assess their data, deliver positive results and impact guest relationships.
If you are looking for an AI-powered solution to improve guest experience without the big technology investment, try our digital concierge, Ivy, for free.
What you can see here
What is artificial intelligence?
Artificial Intelligence describes any computer program which performs tasks that usually require human intelligence. The level of the systems’ intelligence depends on the maturity of the programming. Today’s AI tools can recognize speech, translate languages, identify objects, learn specific behaviors, answer questions and make decisions.
According to Gartner research, by 2022, an American house will have at least 500 AI-driven devices in it. And as more people become familiar with using AI in homes, the demand for AI during their visits to hotels or resorts is likely to grow.
As a result, for hotels and resorts, AI will be powering an entire set of opportunities, both for guests and hotel owners.
AI and the hotel industry
Thanks to sci-fi movies, we often like to equate AI with robots. And while AI is certainly being used in hotels to offer advanced robotic capabilities, this is only a narrow spectrum of its applications.
Every day, a hotel generates huge amounts of data. Everything from guest information to orders and billing to RevPAR values has data points. This is why AI algorithms are becoming so efficient in helping hotels save money, enhance service, and improve operations.
AI analyses data from prominent sources and assimilates them into patterns. By bringing together data from images, voice, video, and texts, AI can help hoteliers uncover meaningful and actionable decision-making insights.
Here’s an example: way back in 2014, a US hotel chain called the ‘Red Roof Inn’ used weather and flight data to analyze flight cancellations. They applied AI analytics to create a marketing campaign, which got the attention of guests affected by flight cancellations. The hotel saw a 266% rise in non-branded mobile bookings as guests chose to stay overnight at their hotel.
Where can you find AI in hotels?
Today, hotels use AI to improve guest experiences, automate repetitive tasks, offer personalized marketing messages, predict surges in utility demands and boost revenues.
Let’s look at some of the specific AI-powered solutions that you can come across in a hotel today.
AI is bringing down the need to interact with an actual human when it comes to answering simple questions. Think about what guests ask your hotel front desk almost every day. Wi-Fi passwords? Extra towels? Opening hours for a restaurant, the beach or a show nearby?
By understanding the context of the conversation (and not just the keywords), digital concierges can handle almost 60% of guest interactions today. And for hotels who have limited staff or want to offer a contactless experience to guests, it can be a godsend.
Chatbots have been around for a while now. We’ve seen them on websites, social media and even apps. Chatbots are programmed to offer responses to standard questions, making guest interactions easier. Guests can find information quickly, and hotel managers can reduce time spent answering repetitive questions. Additionally, chatbots leverage AI to translate questions, making them beneficial to global travelers as well.
Voice activated rooms & IoTs
In the age of Alexas and Siris, the voice-activated device needs no introduction. Voice activation relies on AI-driven Natural Language Processing (NLP) to recognize speech and respond accordingly. This application of artificial intelligence is helping hoteliers personalize their guest interactions. By bringing together AI and IoTs (devices that are connected to the internet), hotel managers are creating a unique luxury experience that guests want to come back to.
Imagine being able to adjust the room temperature or open and close the blinds with voice commands. How about ordering room service without having to leave the bed?
To capitalize on this unique experience for guests, the Wynn Las Vegas has installed almost 5000 of its hotel rooms with Amazon’s Echo. Guests at Wynn can control many of the room’s features, thanks to AI-powered voice recognition devices.
Another way in which AI has impacted the hospitality industry is with the power of data analytics. Hospitality data is being analyzed by AI and machine learning algorithms to deliver measurable business impact insights. By analyzing patterns and trends, machine learning-based algorithms can help hospitality decision-makers to make optimal choices.
Advanced data analytics in hospitality can help hotel owners make relevant offers and create personalized experiences tailored to individual hotel guests. A great example is Caesars Entertainment which uses AI-driven data analytics to enhance guest personalization and satisfaction.
Caesars Total Rewards Loyalty Program has, in fact, made them an industry leader in incorporating AI-driven data analytics in their marketing and customer service strategies.
Another way AI is being utilized within the hotel industry away from pure customer service is in predictive forecasting. AI helps businesses sort through large chunks of data to draw important conclusions about guests or potential operational issues.
Consider how easy it would be to plan for a surge in utility usage if you had two days’ advance notice. Predictive analytics enables hotels to predict and plan for guests’ behavior and carry out operational tasks with ease.
Until now, performing an in-depth analysis of this intensity, at scale, would have taken too long to get any beneficial results. But AI has powered up predictive analytics with advanced modeling techniques and specialized tools. The excellent news is AI can parse through your data and predict surges or fluctuations that impact your business.
This powerful capability can be applied to everything from inventory forecasting to operations. Consider how easy it would be if you could allocate the ideal number of people to a task, flag gaps in scheduling or be given recommendations to meet forecasted guest demand!
Email automation is not new, but its impact on hotels has been significant. One hotel to use this to its advantage is the NH Hotel Group. NH Hotels use AI to manage the massive volume of email requests it receives every day.
Thanks to Natural Language Understanding algorithms, the hotel can instantly identify and process reservation requests without manually sifting through thousands of emails every day.
Benefits of AI in hotel technology
AI can help automate and add a personalized touch to the guest experience, at scale. Rather than replacing human personnel, AI solutions are designed to support hotel employees. Additionally, they take away the “grunt work” leaving humans to do what humans do best. Connect with your guests.
Let’s look at some of the specific benefits of AI-powered hotel technology.
Improved in-room experience
AI is enhancing the in-room guest experience by integrating smart technology into the room amenities. Guests can use voice commands to manage their rooms or text message digital concierges to order room service.
Faster speed of response
AI is shortening the response time to guest issues and questions tremendously. In addition to keeping guests happy, responding or resolving issues faster has been proven to raise hotel ratings and, in turn, attract more business to the hotel.
Hoteliers can leverage AI devices both in the room and over their websites or devices by automating the workload. With AI handling mundane tasks or answering frequently asked questions, it allows hotel employees to focus on creating higher-value, better experiences for guests. And contrary to expectations, 86% of hoteliers agree that AI tools that reduce workload improve employee satisfaction.
Guest personalization is all about data. By crunching large volumes of guest data, AI can help hotels understand guests’ personal preferences, interests and behaviors. AI can then design and deliver timely recommendations based on a guest’s stated and inferred preferences and interests.
With the increased use of intelligent devices in rooms, hotels can further leverage the usage data to create personalized offers that increase profitability per guest.
Hotel business runs on seasons and events to push occupancy and drive pricing. To raise occupancy levels and stay profitable, hoteliers are leveraging real-time market intelligence to create dynamic pricing. Using AI-driven predictive analytics, hotel owners and managers can take advantage of market trends to sustain RevPAR levels at attractive prices.
Additional revenue channels
A 2018 study showed that 70% of hotels say they “never or only sometimes” promote upgrades or upsells at check-in. AI can help maximize the value of premium inventory and improve guest satisfaction by offering guests personalized upgrades based on previous behavior.
Hotels can additionally monetize and leverage room features (that otherwise aren’t captured by standard room category definitions) and optimize allocations. ML technology can create offers at any point during the guest pathway, including the front desk.
Guest satisfaction and reviews
The ability to drive up guest satisfaction by a few percentage points is often reason enough for any hotelier to embrace the promise of AI-enabled guest response systems. AI systems like digital concierges can intelligently sense the right time to ask for feedback or a review. Caesars effectively used a digital concierge to get their hotel rankings for its group of Las Vegas hotels on TripAdvisor, up by 30-40 positions. Additionally, hotels can use machine learning tools to automatically collect, store, and analyze review data from multiple online sources.
AI can both improve guest fulfilment while reducing the time taken to problem-solve. According to a study, the time can be reduced by an average of one-third. This is likely to improve even further as AI evolves to tackle more complex guest experiences.
Reduced operating costs
By efficiently automating several processes, AI can reduce workloads while speeding up responses. This, in turn, helps improve operational efficiency. In fact, 89% of hoteliers agree that AI significantly reduces operating costs, primarily when used in guest supporting roles.
The future of AI in hospitality
The future will see AI and machine learning make in-roads in all aspects of hospitality, improving guest loyalty, making recommendations, and maximizing the experience. Additionally, advanced analytics and recommendation engines will help hotels uncover insights and capitalize on them effectively.
But most importantly, we may also finally see robots. With the arrival of the Amazon Astro (think Alexa on wheels), robots may open up the world of personal butlers, offering luxury support with personalized treatment. Consider the advantages of a robot managing manual work such as luggage collection, transportation of material, and delivery tasks.
Robots in hotels are getting started on tasks like bartending, cleaning, logistics. Additional benefits will depend on how the technology evolves.